{"id":36864,"date":"2017-05-02T16:54:03","date_gmt":"2017-05-02T06:54:03","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=36864"},"modified":"2017-05-03T07:30:21","modified_gmt":"2017-05-02T21:30:21","slug":"the-case-for-level-premiums","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2017\/05\/02\/the-case-for-level-premiums\/","title":{"rendered":"The Case for Level Premiums"},"content":{"rendered":"<div id=\"polls-180\" class=\"wp-polls\">\n\t\t<div class=\"pollHeader\"><strong>Should your advice practice be writing a higher proportion of level premium life insurance business?<\/strong><\/div><div id=\"polls-180-ans\" class=\"wp-polls-ans\"><ul class=\"wp-polls-ul\">\n\t\t<li>Yes <small>(59%)<\/small><div class=\"pollbar\" style=\"width: 59%\" title=\"Yes (59% | 120 Votes)\"><\/div><\/li>\n\t\t<li>No <small>(35%)<\/small><div class=\"pollbar\" style=\"width: 35%\" title=\"No (35% | 70 Votes)\"><\/div><\/li>\n\t\t<li>Not sure <small>(6%)<\/small><div class=\"pollbar\" style=\"width: 6%\" title=\"Not sure (6% | 12 Votes)\"><\/div><\/li>\n\t\t<\/ul><div style=\"text-align: center\"><\/div><\/div>\n\t\t<input type=\"hidden\" id=\"poll_180_nonce\" name=\"wp-polls-nonce\" value=\"465bc9687a\" \/>\n<\/div>\n\n<p>This weeks&#8217; announcement from AIA Australia that it has introduced a new Term Level premium option has prompted us to ask the same question we asked you four years ago &#8211; should you be writing more level premium business?<\/p>\n<p><!--more-->In the four years since we last asked this question, the life insurance industry has witnessed a once-in-a-generation upheaval as it commences its transition to serving an ever-changing consumer world in which (at least) upfront commissions will no longer exist.<\/p>\n<h6>Finding a better way to offer level premium solutions is intended to be one of those new options&#8230;<\/h6>\n<p>This new world places the consumer interest at the centre of all service processes and insurers will be seeking to offer the adviser new options &#8211; new tools they can utilise, in order to serve their clients&#8217; best interests. Finding a better way to offer level premium solutions is intended to be one of those new options (see: <a href=\"https:\/\/riskinfo.com.au\/news\/2017\/05\/01\/aia-australia-rolls-out-term-level-premiums\/\" target=\"_blank\">AIA Australia Rolls Out Term Level Premiums<\/a>).<\/p>\n<p>We know that level premium policies attract higher retention rates (ie lower lapse rates!) because the policy owner isn&#8217;t hit with a price rise every year, especially as the insured life journeys into their 50s and beyond.<\/p>\n<p>For the purpose of this discussion, we&#8217;ll make an assumption that future level premium products are intended to be &#8216;genuine&#8217; or &#8216;true&#8217; level premium contracts that won&#8217;t experience prices rises, eg if it&#8217;s a limited 5, 10 or 15-year term, as offered by AIA Australia.<\/p>\n<p>Are you thinking about increasing the level premium mix in your business? The downside is the challenge of convincing the client about paying the higher premium in the earlier years, balanced by the upside of higher retention levels and lower overall premiums paid by the client over the longer-term.<\/p>\n<p>The stepped versus level premium debate, particularly in the Australian market, has yet to be resolved and we welcome any comments you&#8217;d like to add to this discussion. We&#8217;ll report back next week and will also compare this poll result with the outcome from four years ago.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This weeks&#8217; announcement from AIA Australia that it has introduced a new Term Level premium option has prompted us to ask the same question we asked you four years ago &#8211; should you be writing more level premium business?<\/p>\n","protected":false},"author":3,"featured_media":36894,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49,4],"tags":[4247],"class_list":["post-36864","post","type-post","status-publish","format-standard","has-post-thumbnail","category-polls","category-products","tag-feature"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/36864","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=36864"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/36864\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/36894"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=36864"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=36864"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=36864"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}